Federal Reserve Commentary: FOMC Announcement - October 2013

Federal Reserve Commentary: Today's FOMC Meeting Announcement

The Federal Reserve Open Market Committee voted today to keep the federal funds rate unchanged at zero to 0.25 percent. Today's statement from the FOMC had very few revisions. The Committee stated that information received since the last statement suggests that economic activity "continued to expand" at a moderate pace and that "indicators of labor market conditions have shown some further improvement but the unemployment rate remains elevated." In addition, the Committee said "available data suggests that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months."

The Committee addressed that fiscal policy is holding back economic growth and that despite cuts in government spending over the past year there have been improvements in economic activity and labor market conditions since the Fed began its asset purchase program. The improvements are "consistent with growing underlying strength in the broader economy."

In regards to their purchases of Treasury and agency mortgage-backed securities there were no changes to the pace and the Committee continues to emphasize the importance of economic data before tapering.

There was one dissenting vote from Esther L. George, who was concerned that the continued high-level of monetary accommodation increased the risks of future economic and, over time, could cause an increase in long-term inflation expectations.

The Federal Reserve Open Market Committee voted today to keep the federal funds rate unchanged at zero to 0.25 percent. Today's statement from the FOMC had very few revisions. The Committee stated that information received since the last statement suggests that economic activity "continued to expand" at a moderate pace and that "indicators of labor market conditions have shown some further improvement but the unemployment rate remains elevated." In addition, the Committee said "available data suggests that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months."

The Committee addressed that fiscal policy is holding back economic growth and that despite cuts in government spending over the past year there have been improvements in economic activity and labor market conditions since the Fed began its asset purchase program. The improvements are "consistent with growing underlying strength in the broader economy."

In regards to their purchases of Treasury and agency mortgage-backed securities there were no changes...Read More